As their net worth grows, people often invest at least part of their financial portfolio in instruments that generate income. This income is often earmarked for traditional high retirement priorities, typically including housing, healthcare and travel. Because the objective is to produce a reliable stream of income, the preferred investments may include U.S. Treasuries, municipal bonds, and investment-grade corporate bonds. Of course, the safer the investment vehicle the lower the income stream it is likely to produce, which is why some investors elect to add stocks (especially reliable dividend paying stocks) or stock funds to their portfolios.
Some individuals choose to satisfy their leisure travel and other retirement needs by acquiring real estate, for example by purchasing a second home or by purchasing timeshare units. The purchase may be a real estate transaction that includes associated fees and transaction costs, including marketing. Property ownership also entails on-going real estate taxes, insurance and maintenance costs. Leisure property ownership—whether a direct purchase or via timeshare—is inherently high in overhead and provides assets that are inherently illiquid.
In the current economy, capital is often raised by issuing bonds or other securities that, in some cases, feature cash interest obligations and principal payment obligations. These securities are often used to provide the investment vehicles needed by investors, but they are often not flexible enough to provide optimal or maximal rates of return for an investor, particularly for investors who seek to use their investments for retirement travel and leisure. Improved investment vehicles are needed.